Category Archives: Foreclosure Property

Picking the Most Appropriate Foreclosure Homes for Sale

Many have jumped into the bandwagon of foreclosure homes for sale. This is because the opportunities are really good and the chance to spot a good property is abundant. There are several types of foreclosures in the market today. Each kind possess their own charm that can appeal to different types of buyers.

Here are some of the more popular forms of foreclosures:

Pre-Foreclosures

Pre-foreclosure homes for sale are offered either by the financing company holding the unpaid mortgage or the home owner themselves. At this point the home has not yet been foreclosed upon. Usually the home owners decide to sell the property off to prevent foreclosure and save their credit reputation. Buyers of foreclosure homes for sale in this manner may be able to conduct a thorough inspection of the home before committing to purchase. There may also be a wider berth for negotiations as the owner is fighting against a deadline.

Auction Sales

Right after a property has been foreclosed on it usually goes to the auction block and offered to the public. As any auction goes, bidders attempt to best each other in a bidding process. Auctions are cash sales so buyers planning to purchase a home in this manner should be prepared to pay for the entire amount of the property in a very short time. Homes sold at auctions may fetch the lowest price but buyers do not have the luxury of inspecting the home.

REO Homes

Homes that do not sell at auctions revert to the holder of the mortgage and become real estate owned homes. A lot of people find this manner of buying foreclosure homes for sale to their liking. It is probably because of the feeling of security that comes from dealing with a bank or an established financial institution. The price of the home may not be as low as a pre-foreclosure or an auction home but banks do offer perks to stimulate purchase. Once the home becomes a real estate owned the mortgage is extinguished and it comes to the market just like a brand new property. Banks likewise offer title insurance and pest certification in the package.

Joseph B. Smith has been educating buyers on the finer points of foreclosure homes for sale at BankForeclosuresSale.com for over ten years. Contact Joseph B. Smith through BankForeclosuresSale.com if you need help finding information about foreclosure homes for sale.

Article Source: http://EzineArticles.com/5192604

Building Personal Wealth With Bank Owned Properties

Bank owned properties are also known as real estate owned homes. They are sold as is but at greatly discounted rates. Most banks have an inventory of foreclosed homes that they consider non-performing assets. The pressure is high on them to sell these homes as fast as possible as they bear down on the resources of the bank.

Qualities of Bank Foreclosures

Distressed homes become bank owned properties when they do not sell at auctions. The banks then appoint real estate agents or brokers to sell these properties for them. They also list the homes in various foreclosure listings. Banks go the extra length to ensure that these homes get sold. Once a home becomes real estate owned, the mortgage is extinguished but is priced closer to the value of the outstanding loan than the real market value. The homes offer great savings potential for buyers.

Prospective buyers of bank foreclosures should be able to inspect the property prior to signing the deed of sale. In fact buyers can stipulate a clause on the sale contract that will allow them to pull out of the agreement pending the result of the home inspection to be carried out by a professional inspector.

Bank owned properties sold to the market always come with title insurance unlike other types of foreclosures where would be buyers still need to conduct a title search to reveal the status of the property in terms of back taxes, liens and other holds.

There will typically be a minimum pest certification that comes with the home and the bank will likewise handle the eviction of former occupants so that the new owners can move in without much problems.

To purchase bank foreclosed homes, you need to make an offer through the bank-appointed agent or broker. The bank can make a counter-offer which you may either accept or do a counter-offer for. You may also negotiate for other aspects of the contract like the mortgage terms and the rate of interest.

Joseph B. Smith has been educating buyers on the finer points of bank owned properties at BankOwnedHome.net for over five years. Contact Joseph B. Smith through BankOwnedHome.net if you need help finding information about bank owned properties.

 

Article Source: http://EzineArticles.com/5407810

REO Homes – Buying Bank Owned Properties – Real Estate Basics

Are you interested in buying bank owned REO properties? I’ve laid out a very basic description of what an REO is, considerations before buying one and the general process to purchase one.

REO stands for ‘Real Estate Owned’ and is bank owned real estate. This can be a great opportunity for an investor. These properties have already gone through the foreclosure process. The bank has tried to sell the property at a public auction but was unsuccessful. Now the mortgage no longer exists and the bank has to take the property back.

Fortunately, you won’t have to go through the mortgage company now; you’ll deal directly with the bank. Any liens against the property will be taken care of by the bank and they are no longer a concern for the prospective investor.

Buying REO properties gives the buyer great leverage since they are often highly discounted and have the potential of bringing in a nice return if rehabbed and sold quickly. But you do want to be careful how you go about buying an REO. There may be a good reason why the property was not able to be sold at public auction. It’s your responsibility to make sure that this is still a good deal.

Banks want to sell these properties because they are not set up as property management companies. And often times they are penalized by the government for holding REO properties. They are losing a lot of money and will sell the properties very cheap if necessary. Often times up to 30% discounted or more.

The ball is in your court to make sure that the price of the property is truly worth paying. Compare the property with other similar properties in the neighborhood. This is called checking the comps. A real estate agent might be able to help you in this process. You would look for several properties in the neighbor hood with a similar age, construction and layout. You would want to see the average sale of similar houses to be much higher than what you are looking to pay for your REO property.

Be sure there is enough equity in the home. After doing repairs will there be about 30% equity in the property? At this point you don’t want this to be an average priced property. You are looking for a deep discount.

Look for major repairs that might make it a poor investment. The bank is most likely selling their REO’s “as is.” That means that if there are major repairs on the property, you will be responsible to fix them. That is why you should be sure to inspect the home. If you do not have experience in this area it is advisable that you hire a professional to check out the home with you.

The bank will most likely see you as more serious if you request an opportunity to do such an inspection. If you do find something wrong, don’t expect the bank to repair it. Of course, it couldn’t hurt to ask since they are trying to get rid of the property. Regardless, REO homes almost always need repair. Even if you do not find something major, there will be minor repairs such as carpeting, paint and perhaps windows to replace. If you are looking to fix it up and sell it be sure to understand the costs involves for repairs. Be sure to factor those costs into the purchase price.

Also consider the time it will take to do the renovations. There are monthly costs you will have to incur while you are renovating the property. These are called holding costs. Be sure that your property is in an area that it will sell. If not you might want to consider rent options. Location is important!

When considering purchasing an REO it is helpful to understand that banks want to get the best price they can get for the home. They also have to consider costs they must bear each month they hold onto the property. There is usually a bank REO department that will deal specifically with these properties.

You will make an offer to the bank. The bank will most likely make a counter offer. Their offer will most likely be higher than you expect. They must demonstrate to their company that they attempted to get the best price. At that point you will make a counter offer to the bank. When you get to that point expect the bank to take a while to respond to your offer since there is likely to be several levels of approval the offer must go through.

Offers are usually faxed back and forth between parties. And as much as you might be excited and anxious to get a reply be aware that bank hours do not include evenings or weekends.

Be sure to include contingencies in your offer so that you will have a time period to thoroughly go through the property and reject the offer if something major is discovered.

The REO sales process can be both exciting and frustrating. Be patient and do your due diligence. Solid REO sales are good for both you and the bank. They are getting debt off of their hands, and if you know what you are doing, you will be getting a great investment deal.

Article Source: http://EzineArticles.com/4290588

Save Money Buying a Foreclosure Property

Buying foreclosure property can yield substantial savings, as long as buyers understand how to capitalize on available options. Most people are familiar with buying houses through foreclosure auction, but this is not always the best approach.

Foreclosure property sold at public auctions often has two or more mortgage loans attached. Real estate auction prices are established based on the balance owed on the first mortgage. Buyers are responsible for conducting due diligence to determine if additional mortgages, tax liens, or creditor judgments are attached. If so, buyers must engage in negotiations to pay off outstanding balances in order to take possession of the property.

Another drawback of buying foreclosure property through auctions is buyers are usually required to provide funds within 24 hours of submitting the winning bid. This may not be a problem for investors who buy homes with cash, but can be challenging for first time home buyers or those purchasing foreclosure property as a second home.

Most people who buy houses at auction obtain preapproved financing through their mortgage lender. Others take out a home equity loan using their primary residence as collateral to secure the loan. This strategy can place buyers’ primary residence at risk for foreclosure.

Instead of attending foreclosure auctions, many people are now looking at buying bank owned real estate. These properties encompass foreclosure realty that did not sell through auction. When banks retain ownership they sometimes make repairs to return the home to livable condition or make it more marketable. However, properties are sold in as-is condition and any work performed is not covered under home warranty.

One of the biggest advantages of buying bank owned vs. foreclosure properties is real estate owned by banks are sold with a clean title. Not only does this save buyers money, it also allows them to take quick possession of the property.

Bank owned real estate is usually priced higher than homes sold through auction, but all the time-consuming and costly details are taken care of. Many states include a redemption period for properties sold through auctions. If foreclosed property owners are capable of paying off the outstanding loan balance they have the option to buy the house back from the winning bidder. The possibility for owners to reclaim their property is eliminated when buying houses through banks.

The downside of buying bank owned foreclosures is mortgage lenders rarely reduce the purchase price. Buyers often compete with multiple buyers and should be prepared to submit their highest offer. The exception to obtaining reduced prices through banks is if substantial repairs are noted in the home inspection that was not recorded when the real estate was initially repossessed.

One option to buying foreclosure property though banks is Fannie Mae’s Home Path Mortgage program. In addition to offering discounted real estate, Home Path provides special financing options for buyers with bad credit, along with a low down payment requirement of 3-percent.

Many real estate investors are turning to Fannie Mae foreclosures because these properties often qualify for grants under HUDs Neighborhood Stabilization Program. Individual buyers and investors can apply for NSP grants when purchasing real estate in areas that have high foreclosure rates.

Combining NSP grants with Home Path’s low-interest and low down payment loans allows buyers to purchase real estate at substantial savings. Details about Fannie Mae’s Home Path Mortgage program are available at HomePath.com.

Buying foreclosure property is not without risk. Anyone planning to buy foreclosed homes as a primary residence or investment property should become familiar with the pros and cons of buying distressed real estate.

The primary goal is to buy houses well below market value, make necessary repairs, and either obtain instant home equity or quickly sell the property for profit. Buyers must conduct due diligence to ensure the home is actually a good deal and not a money pit.

Article Source: http://EzineArticles.com/5003851